What Prediction Markets Are Forecasting

Prediction markets currently give the "Blue tsunami" scenario about a 38% chance of happening. This means traders collectively see it as somewhat unlikely, roughly a 1 in 3 chance. For this prediction to pay out, Democrats would need to achieve a clear sweep in the 2026 midterms: holding at least 235 seats in the House of Representatives (a strong majority) and maintaining at least 51 seats in the Senate. Both conditions must be met. The current odds suggest that while such a dominant win is possible, the market believes it is not the most probable outcome.

Why the Market Sees It This Way

Two main factors are likely shaping these odds. First, the political party holding the White House typically loses seats in midterm elections. Since the 2026 elections will occur during the second half of a presidential term, historical trends work against the party in power, which in this case would be the Democrats if they win the 2024 election. This "midterm penalty" makes gaining large majorities difficult.

Second, the specific seat math is challenging. The Senate map in 2026 is more favorable to Democrats than the 2024 map, but defending a narrow majority is always difficult. In the House, reaching 235 seats requires a net gain of about 10 seats from the current balance, a significant swing in a national election. Traders may be skeptical that the political environment will be favorable enough for Democrats to overcome historical trends and achieve such gains in both chambers simultaneously.

Key Dates and Events to Watch

The major event is, of course, Election Day in November 2026. However, the political landscape will be shaped by events throughout 2025 and 2026. Key signals to watch include the results of the 2024 presidential and congressional elections, which will set the baseline for 2026. The state of the economy in 2026 will be a major factor, as is typical in midterms. Also important will be candidate recruitment and retirements, especially for key Senate races, which often become clear in the year leading up to the election.

How Reliable Are These Predictions?

Prediction markets have a solid track record in forecasting election outcomes, often performing as well as or better than polls, especially further from an election. However, for an event this specific and over two years away, the forecasts are highly fluid. The 38% probability reflects a huge amount of uncertainty. Current odds are based on the political fundamentals and historical patterns, but they will shift significantly based on the 2024 results and the political climate that develops in 2025. These markets are better seen as a snapshot of current collective thinking than a firm prediction.